As supply chains shift, payment corridors need to keep up

For much of the past two decades, an Asian supply chain usually meant a factory in China, an invoice in US dollars and a payment along a familiar banking route. Tariffs, geopolitical tension and the lessons of pandemic-era disruption have changed that, pushing businesses to spread production across more markets under what is widely called "China plus one".

The physical side of the shift gets most of the attention. The financial side gets far less, yet every new supplier location brings a new currency, new banking rules and often new documentation.

China plus one usually means more corridors

ASEAN attracted US$246 billion of foreign direct investment in 2025, up 10% on the year.[1] Vietnam's exports to the US rose 28% to US$153 billion, with Vietnam specialising in electronics assembly, Thailand in automotive production and Malaysia in semiconductor packaging.[2]

Reliance on China has changed less. Vietnam's imports from China rose by almost 30% in 2025, and there is a similar flow of Chinese intermediate goods into Mexico and India.[3] A business that moves final assembly to Vietnam often keeps paying Chinese component suppliers while adding Vietnamese manufacturers and logistics providers. In practice, diversification tends to add several new payment corridors alongside the original.

Why payments fall behind

Sourcing decisions are usually made by operations and procurement, with payments set up afterwards and often copied from existing corridors. Four differences tend to surface quickly.

Currency. The Vietnamese dong, Indian rupee and Indonesian rupiah do not trade freely offshore. Paying in US dollars by default moves the conversion to the supplier's bank, and the cost tends to reappear in the supplier's pricing.

Documentation. Banks in Vietnam ask for contracts, invoices or customs declarations before selling foreign currency for import payments.[4] In India, inward payments are classified under Reserve Bank of India purpose codes, and unclear details can see a payment held or a supplier's export record left open.[5]

Banking reach. A bank that handles payments into China with ease may have thinner coverage in Ho Chi Minh City, Chennai or Monterrey. Longer chains of intermediary banks add time and deductions.

Data. Local account formats and bank codes vary by market. With richer ISO 20022 payment data and tighter FATF transparency rules, incomplete beneficiary details are more likely to stop a payment than they were a few years ago.

What it costs

The impact is small on a single payment, but it adds up across hundreds of payments:

• ‍Production delays when a supplier's deposit is held for a document query.
• ‍Short payments when intermediary deductions leave the supplier below the invoice amount.‍
• Hidden conversion costs when money is converted twice, for example from Singapore dollars to US dollars and then into dong.‍
• Cash tied up in larger buffers to cover unpredictable settlement.‍
• Weaker relationships with new suppliers who have no payment history with you.

Where to start

A short review of each corridor catches most of these issues early. Finance teams should map every country and currency they pay into, decide whether local currency or US dollars works better for each supplier, build each market's documentation into the payment process and check what suppliers actually receive. It is also worth asking providers how payments reach each destination, capturing complete beneficiary details at onboarding and extending the FX policy to cover new exposures.

Keeping pace

Supply chains will keep moving as tariffs and costs change, and payment arrangements need to be flexible enough to follow.

At APA, we work with corporates and private clients moving significant sums across borders, including into markets with managed currencies and strict documentation rules. Our teams across Asia-Pacific, Europe, North America and Africa help clients understand what each corridor needs, so suppliers receive what they expect. If your supply chain has changed, speak to our team about how you pay for it.

References

[1] Thailand's Board of Investment, via Nation Thailand. https://www.nationthailand.com/business/40071324

[2] Fortune, "Southeast Asia, China plus one, manufacturing", 5 October 2026. https://fortune.com/2026/10/05/southeast-asia-china-plus-one-manufacturing/

[3] ISI Markets, "Global supply chain diversification to Mexico, Vietnam and India still runs through China". https://isimarkets.com/insights/global-supply-chain-diversification-to-mexico-vietnam-and-india-still-runs-through-china/

[4] CTBC Bank, SBV required documents checklist. https://www.ctbcbank.com/content/dam/twcbo/files/vn/news/SBV%20Required%20Docs%20List.pdf

[5] Reserve Bank of India, "New Purpose Codes for Reporting Forex Transactions". https://www.rbi.org.in/upload/ERSystem/FETERSV62New.doc